tv All In With Chris Hayes MSNBC May 6, 2013 8:00pm-9:01pm PDT
out through the bottom of the door first. this is a gentleman, charles ramsey, that let her use the phone to call 911. and it was not a baby according to him, a child nine or ten years old. >> rachel dissell, thank you for joining us on this breaking news night. >> reporter: thanks so much. chris hayes is next. good evening from new york. i'm chris hayes. thank you for joining us tonight. there is a lot happening on this monday, including the shocking arrest of the lieutenant colonel in charge of the air force's sexual assault prevention program. he himself is charged tonight with sexual assault. two big banks are accused of violating their responsibility to help struggling homeowners. i'll have the exclusive interview with the attorney general who is cracking down. and a major tax bill passes in the senate, pitting republican
against republican, democrat against democrat, and grover norquist against big retailers. all that, plus click 3. we begin with new and mounting pressure on the united states to get involved in yet another war on the middle east. a war that just in the last few days has shown signs of erupting further into a true regional conflict. syria has been embroiled in a civil war for two years. what you're seeing are israeli air strikes along the outskirts of the syrian capital. the bombings hitting military targets second time in three days on sunday. the syrian government responded with outrage calling the bombings a declaration of war and if that's not a warring enough sign the civil war could be poised to spill over the borders, iran has taken the opportunity to announce it is ready to support the syrian regime with military training. it is something many western
officials believe iran has already been doing. but the fact they're now willing to go public is an important sign of the potential for this conflict to continue to spread. in another sign of the conflict's potential to expand, even bizarrely made it its way on to social media today, as syrian hackers supported the government forces reportedly took over the onion's twitter account briefly, resulting in tweets which have been deleted were weird and offensive. here is one example, u.n. retracts report of syrian chemical weapon use, lab tests confirm it is jihadi body odor. as the syrian conflict expands and seems poised to spread across the borders, the internal political pressure on president obama to do something, to get involved, to intervene in some way, is growing in a very, very palpable way. >> the whole situation is becoming more and more expansive and unfortunately the red line that the president of the united states written was apparently written in disappearing ink. the obama administration should be, i think, cognizant of what
george schultz, our former great secretary of state, once told me when he was in the marine corps, his drill stricter told him, said, never point a weapon at someone unless you're ready to pull a trigger. >> john mccain, of course, has long been leading the corps ous calling for the u.s. to step into the syrian conflict, calls that intensified the signs the war might be spreading. there is no doubt the pressure from those calls for action is being felt inside the white house. john kerry is headed to moscow to try again to convince the russians who supported the syrian government to work with the united states on a political settlement to the civil war some really valuable white house reporting from dexter filkins shows what this pressure looks and feels like inside the obama white house. quote, the pressures on us to intervene now are enormous, senior white house official said, but the day after you do something, the pressure is going the other direction. in libya, the day after we intervened, all the pressure went from why aren't you intervening to what did you just
do? that sentiment perfectly encapsulates what is so dangerous and worrying and frankly scary about what is happening in syria right now. the effect of everything that developed around that conflict in last few weeks and especially in just these last few days has been more pressure on the united states to take action there, to do something. that pressure is coming precisely the moment the war on syria seems likeliest to spread. when it is becoming less and less clear what could even be accomplished with increased u.s. involvement. a driving force behind the drumbeat to war in this country is the reported use of chemical weapons by the syrian regime against civilians. the so-called red line that president obama is being so cleverly accused by john mccain of having written in invisible ink. the story behind the chemical weapons in syria, like pretty much all of the news coming out of the country now, is fraught with confusion and chaos. this weekend, in an eye catching interview on swiss television, a u.n. official said there were, quote, strong concrete suspicions of the syrian rebels, not the government, having used chemical weapons.
that was met with a tremendous amount of pushback including a walkback from the u.n. itself and special attention from the white house today. >> we're highly skeptical of suggestions that the opposition could have or did use chemical weapons. we find it highly likely that any chemical weapon used that has taken place in syria was done by the assad regime. and that remains our position. >> the only thing about the syrian civil war that is clear right now is that it is escalating. the potential for spillover gets higher, and the pressure for this country to join in as the war spreads is building. regardless of what the consequences of intervention might actually be. joining me at the table, ayman mohyeldin, rula jebreal, and dexter filkins. great to have you all here.
dexter, let me begin with you. phenomenal piece of reporting, your reporting has been really excellent out of the region. what is going through the white house's conversations as they watch israel undertake these two strikes this weekend, which there had been one previously in january, so this is not exactly completely new, but it does look like an escalation and the syrian response has been escalated. what are those conversations in the white house like? >> well, just the israeli strikes, in a way they're not about syria as much as they are about lebanon, about hezbollah, the big arm group which sits on the israeli border. syria is the transit point for all the weapons that hezbollah gets from iran. so israel is rightly concerned and they have been concerned for years now as everybody gets ready for that war between israel and lebanon, they're concerned about the kinds of weapons that hezbollah is getting.
and so they're just taking care of business. it is basically what they do. >> they are taking care of business in a way that means air strikes in another country, which, again, if the shoe were on the other foot, if we were setting at the table now about a syrian air strike in israel, we would be looking at a massive conflagration, right? >> i think the israeli commanders probably correctly assumed that assad has got enough to worry about right now. and they can probably strike with impunity for now. in the white house, i think it is different. the pressures are very, very different. i think they're growing here for the white house to do something, and i think you mentioned that it is basically two things. it is chemical weapons. it looks like maybe they have been used in about five places. the evidence is starting to build. and my story, we interviewed somebody -- >> an eyewitness. >> an eyewitness, a blue haze as he described it. >> we should note, you were put in touch through an organization that deals with syrian rebels, right? that was the way you came to know this eyewitness. >> yes. we tried to be pretty careful about that. he sounded like he was telling the truth.
but it is hard to know and these things are not easy. but so that's one pressure. the president said himself and he's been very careful, when we talk about the red line, what is the red line? obama has been very careful. he hasn't just said chemical weapons use, he said a whole bunch of weapons, maybe in a systematic way. that is way and it is basically, look, this is a humanitarian catastrophe. you have 70,000 dead. >> so you guys have both been in the region a lot. let me just say, as someone who is not an expert in the region who has not been there, watching all this unfold, reading it, my reaction is to be torn, is to be torn about the prospect of u.s. intervention, absolutely horrified by the brutality of very clearly documented brutality by the assad forces against civilians, massacres, just awful stuff, right? but to read the calls for intervention right now, it just seems to me crazy. it seems like are you out of your mind? have you not lived through the last ten years of the u.s. and the region? i want you to explain to me if
i'm crazy to read these calls for intervention and think these people are nuts. >> you're right. you're absolutely right. options are bad from both sides. not that you have assad and you have three kind of groups fighting today in syria, the people that want democracy who are the minority, the free syrian army, and within the free syrian army, hard corps islamists who are allied with al qaeda today and slaughtering everyone from the other side. and you have another group who want sectarian -- they want sunni supremacy, who are backing today the free syrian army. i'm with you that assad is a brutal dictator and must go. have to go. but the other side is backed by the qataris and the saudis. they don't want democracy in their own countries, but they want democracy in syria. is that who we're dealing with? >> i want to show this photo that you sent to me. we have this photo of a picture of some fighters in the free syrian army, and it just
represents the -- >> these are hard core islamist jihadists who wants -- they have one agenda, an islamist state. and in that islamist state, the minorities, 12% alawites, the christians who are 10% and others are not included in a post assad era. the only examples that we have today is iraq, where the sunnis, where actually put on the side and the -- took over. until today you have sectarian violence, until today. and we replaced assad with maliki who is not better. >> so one of the benefits of covering the arab spring from almost the first day is you have a good perspective of the past two years and the region.
and this sentiment that is sweeping across the region. and i've been to syria twice, to tunisia, libya, egypt. one of the unique things that is unfolding in the middle east is the spirit which is driving many of these uprisings. i think that has been lost in the case of syria today. but two years ago, the motivation and the inspiration was very much linked to egypt, libya, tunisia. it is undeniable. >> explicitly so. some wrote down with the regime, with a phrase that had been used in other countries. >> what happened in past two years is almost a retardation or a change in the participants of that uprising because people saw the opportunity and are exploiting it. from what i have seen in my reporting there, i feel that the core of the movement is still the same ideological movement for reform, for democracy, but people have tagged on to it including extremists and sectarian tensions. however, however, at this stage, i think one of the lessons we have learned is that two years from, you know, the absence of leadership, in the international
community, has led to this breakdown of the syrian state into a civil war. >> so can we gain this out, though. there is a variety of calls for escalating u.s. intervention, okay. one of them is a no-fly zone. would that -- what would that look like on the ground? would that be effective? you're rolling your eyes. >> probably not. not very. i mean, look, most people not being killed by air power. so they're being killed by, you know, artillery and scud missiles that are being fired right into neighborhoods. so if you set up a no-fly zone, you'll save some people, but i think -- just to get back to the conversation about the possibilities of u.s. intervention, i think if you're -- i certainly can't speak for the president, but he's got to imagine do i want -- do i want to -- as part of my legacy, do i want to have 100,000 people killed in syria? possibly with a large scale gas
attack? is it -- i mean, it is hard to imagine that if assad starts to use the chemical weapons in a large way, and there is a lot of people who believe he's prepared to do that, that we could actually do nothing. >> israeli intervention and you read the newspapers today in israel, they're concerned that assad will feel cornered, he will use in a massive scale weapons, chemical weapons and others, and the really scary thing, if america is part of this, this will open a theater for more jihadists and more -- >> that's part of the calculation here, which i think is sort of a terrifying one, this kind of little bit game of chicken to the extent that assad genuinely feels he has nothing to lose, that perhaps ratchets up the likelihood of precisely the thing everyone wants to avoid when is some sort of systematic deployment of these chemicals. >> we should be a little more accurate. this is a regional conflict. >> it already is a regional conflict. >> it singed every country that neighbors syria. it involves saudi arabia, qatar
sending weapons, turkey, even egypt to some extent. but the point of this isn't identifying that it is a regional conflict. it is where the proxy players, and who is dragging who into the war. because ultimately it is the syrians who are paying the price for this regional conflict, and the regional tensions on many different fronts. >> dexter filkins, ayman mohyeldin, and rula jebreal. thank you very much for that. appreciate it. sexual assault in the military is a problem in dire need of solving. one of the main officers in charge of solving it got arrested for, and i wish i was making this up, sexual assault. that's next. from capital one, bjorn earns unlimited rewards for his small business. take these bags to room 12 please. [ garth ] bjorn's small business earns double miles on every purchase every day. produce delivery. [ bjorn ] just put it on my spark card. [ garth ] why settle for less? ahh, oh! [ garth ] great businesses deserve unlimited rewards. here's your wake up call. [ male announcer ] get the spark business card from capital one and earn unlimited rewards. choose double miles or 2% cash back on every purchase every day.
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coming up, my exclusive interview with eric schneiderman on his planned lawsuit with two of the nation's biggest banks. first legal claim against big banks since the mortgage crisis. up next, the implications of the shocking sexual assault arrest with the man charged with preventing sexual assault in the military. stay with us. to treat my low testosterone, my doctor and i went with axiron,
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breaking this evening, lieutenant colonel jeffrey krusinski, the chief of the air force's sexual assault prevention and response program, was arrested this weekend and charged with sexual battery. krusinski was arrested in arlington, virginia. according to the arrest report, he approached the victim in a parking lot and grabbed her breasts and buttocks. about an hour ago, the air force released this statement. lieutenant colonel jeff krusinski was charged with sexual battery in arlington, virginia, over the weekend. the case is currently under investigation. he has been removed from his position as the sexual assault prevention and response branch chief pending the conclusion of the investigation. he served in this position since february 2013. the air force has a historic
problem with this, under fiery centrally for a decision to throw out convictions like that of james wilkerson who was convicted last year and reinstated into the air force after spending a year in jail. and captain matthew herrera found guilty by a jury of five air force officers of sexually assaulting lieutenant and then granted clemency. jackie speier of california has repeatedly criticized the military for how it handles sexual assault cases. >> congress has known about this problem in the military for 25 years. we had lots of hearings, lots of reports, but are we willing to step up and do the right thing by taking it out of the chain of command so that the victims really have the freedom to report these crimes and feel that they are not going to be marginalized and labeled and then dismissed from the military? >> and on top of all of this, tomorrow, tomorrow, the pentagon will release the annual report of sexual assaults in the
military, which will show that sexual assaults in the military rose 6% from 2011 to 2012. joining me tonight, anu bhagwati. executive director of service women's action network. good to have you here. you've been very outspoken, you're a veteran, and you've been working on this issue. first, i want to get your reaction to this news tonight which had all of us shaking our heads that it was not an onion headline or something. >> it is shocking. but not surprising. we have been working on this for several years and we regularly see that field grade officers, even general officers, are committing acts of sexual assault. we shouldn't be surprised. i think, you know, we tend to really honor the military for all the good that service members and veterans do. i was part of that culture. i loved it. but there are some serious aspects of the criminal justice system which are just broken. and i think for anybody to say that the criminal justice system works within the military, it is just a hallucination at this point. >> what are those -- what is
broken? and how -- where do you find yourself with the trajectory to this issue. it seems there has been a mounting, effective campaign to highlight what has been going on. and i wonder what we're going to see now in the wake of this. >> well, we reached a tipping point in terms of national attention to this issue, which is an incredible opportunity for us. but we're still facing incredible resistance, especially within the senate and the house of representatives when it comes to actually reforming the criminal justice system. and so what we have today is a system in which commanding officers determine whether or not sex crimes in fact, all crimes go forward to court-martial. and it is a system which is inherently biased for that reason. it is the accused boss determining whether or not that crime goes forward. and so it is not just the victim who may not face a just trial, it is the accused as well. fair and impartial trial. >> i should take this opportunity to note the person we mentioned, lieutenant colonel, is just accused at this point, he's been arrested, but innocent until proven guilty.
be clear about that. i want to read a statement. this came up quite a bit in his confirmation hearing. i'm committed to implementing measures that bring about tangible change in real results. addressing the problem of sexual assault will remain a top priority to the department's leaders for as long as this crime continues to hurt our people and weaken the force. we've heard a lot like this from the armed forces. is that rhetoric matched by changes institutionally by the forces? >> he's proposed what we're calling a back end reform to the criminal justice system. it was some response to the wilkerson case in which the conviction was overturned of a convicted sexual offender, which was shocking enough, this was a couple of months ago. we need front end reform as well. we need trained attorneys, impartial attorneys and judges overseeing the entire criminal justice system. commanding officers still have oversight of the entire beginning to end. it doesn't make any sense. >> it seems to me that there has been a lot of this specifically around the air force.
and obviously the problem i think extends across the services and that's been clear in the reporting i've read. are there institutional differences? are there branchs that are doing a better job than others? >> well, ironically the air force seems to be doing the most, and so we have really sensible reforms like special victims counsel programs being offered by the air force, and in fact legislation is being introduced tomorrow, bipartisan legislation to make sure all the other branches get on board with the very sensible program. it would offer every victim who reports the crime her or his own special attorney. that doesn't even exist in the civilian world. it is something we should support. but all of this was in response, unfortunately to the lackland sexual assault scandal in which about 60 students now were assaulted by 30 some odd instructors. >> at a instructional facility. >> at the basic training facility for the entire air force. both women and men were assaulted as is the case usually.
so we see a systemic breakdown in culture within the air force and in reporting by fellow instructors who are struggling with whether or not to do the right thing and reporting their fellow airmen. it is a complete breakdown in right versus wrong. it is an ethical failure this is happening throughout the military. >> who is ultimately going to be the -- who is going to change this? it sounds like you're saying congress needs to act. there needs to be a legislative solution that changes the way the criminal justice system operates and takes it outside the chain of command. >> the military can't train its way out of this mess. it has to be legislative. there is no question. the public i hope is up in arms about this, it is not an unusual incident. this is happening every day in the armed forces and we want to see a change. >> anu bhagwati, thank you very much for joining me. >> thank you. finally, there is legal action against big banks who are accused of screwing over home owners. my exclusive interview with the attorney general who brought the suit. that's coming up. new car!
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court against wells fargo and bank of america for repeated violations of the massive 49-state bank settlement. we have told you a lot about the systematic abuses by banks including homeowners being wrongfully foreclosed upon. the practices were so widespread that 49 attorneys general joined a suit against the banks that led to a $26 billion settlement. in the grand scheme of things, that money is a cost of doing business for the banks. the settlement also set basic standards for the banks to meet to reform business practices going forward. lo and behold, these banks have flagrantly violated the agreement. according to the attorney general. anyone who has been following the banks over the last six years should not be surprised by that news. the big question is what will finally make them stop. joining me tonight in his first interview since initiating this enforcement action is eric schneiderman. new york attorney general. great to have you here. >> good to be here. >> so the banks engage in all
these practices. there is this settlement. and part of the settlement is you can't do this anymore. how did you guys come to decide they were in violation of the settlement? >> well, the servicing settlement has -- provides for relief for homeowners, but also has 304 specific rules the banks have agreed to follow. so in new york, we invested in a network of housing counselors and legal service providers because when i took office, half of the families being foreclosed on were going through the foreclosure process without speaking to a lawyer once. we decided to change that. as a result, we got this great network out there that have been helping us collect information. there were so many violations, we created our own special form to check which of the servicing requirements the banks were violating. we determined pretty quickly that wells fargo and bank of america were far and away out in front of the other banks as far as violations go. there are very specific terms they have agreed and are legally obligated to follow, they have
to get back to home owners within five days of a request for a modification on a mortgage, to tell them if there are deficiencies, missing documents. the homeowner has 30 days after that to fulfill the deficiencies and the bank has to make a decision in 30 days. none of this we lost your documents, come back month after month. they have been violating that. we have 220 complaints about wells. 129 about bank of america. we're taking them to court. >> and the context of this, i've done some reporting on this and talked to folks on the other end of this, totally kafkaesque stories of sending loan documentation in 12 times, 12 different people, they lose it, sending in checks that get lost, horrible things going on which was the thing that created the settlement in first place. >> they have new obligations. in addition to whatever work is being done by the monitor, that was created under the settlement, parties to the settlement, new york is a party, have the right to enforce it. we're following the procedures. we sent notice to the monitoring committee, telling them we're going to file suit. they have 21 days to take action. if they don't, we're going into the u.s. district court in the
district of columbia and we'll bring them in, seeking injunctive relief to force them to change their business practices and have the court impose penalties on each case where they failed to do so. >> i want to just read statements from each bank, issued statements today, one of our reporters got these statements. wells fargo is committed to full compliance in the national mortgage settlement, its standards. it is unfortunate the new york attorney general has chosen this route rather than engage in a constructive dialogue for the established dispute resolution process. we fully support the rules established on the settlement and will continue to provide transparency into the progress we're making to provide relief to consumers. bank of america, a bit different tone, attorney general schneiderman has referenced 129 customer servicing problems which we take seriously and will work quickly to address. this agreement has been good for new york and we continue using the beneficial programs to assist troubled homeowners in new york and nationally. wells fargo seems to indicate you don't have the authority
under the agreement to take action that you're taking, that actually you have to go through a dispute resolution with this person who has been established under the settlement to monitor infractions. is that the case? >> no, no. wells isn't saying that. they're suggesting we should have spoken about this and then they would have changed -- listen, our lawyers and the lawyers for our legal service providers and housing counselors are dealing with these banks every day. it is not as though we're not trying to resolve these problems. they just haven't been compliant. and they're doing a much worse job than the other banks which is not charitable institutions by any means, but they're in flagrant violation, no question that the monitor has an obligation to monitor, which is why it is called a monitor, to issue reports in the aggregate and has some powers under the settlement agreement. the parties to the agreement have the ability to go into court and there is a procedure set forth where you have to give notice and go into a particular court, designated, the federal district court in washington. we're following the procedure. no doubt we have the authority to do it. and we're taking these guys to court. >> here is the $64,000 question
for you. dave dayan reporting on this, he's been critical of -- critical of the settlement, critical of some of the stuff you've done, basically, i have a long quote, i'll summarize, this agreement was too weak was the beginning thought and more broadly, here is the question i want to pose to you. what does it say about the settlement that they just went back to doing the same stuff? that, to me, is the big question. what is going to get them to stop? there have been numerous private lawsuits, there is a settlement with the occ. there is this settlement. it is not like they haven't been caught red handed literally thousands of times doing all sorts of crazy stuff like foreclosing on people who are current on their mortgage, right? so the question is, why aren't they stopping? is this settlement is what it was cracked up to be, why are they still doing this? >> the settlement in itself provided a lot of relief. it provides very specific terms and it was actually pretty well negotiated. the problem is the banks have
overwhelming confidence that law enforcement is not taking this seriously. overwhelming confidence that whatever the rules are, won't be followed up on. i held out and refused to be participate until they carved out and created actually an unprecedented state federal working group to investigate the conduct that blew up the american economy. keep in mind, these are the same guys who issued all the mortgage-backed securities to get us into this mess in first place and lost -- we lost $7.4 trillion in home equity, that's why we're dealing with so many foreclosures. so they just don't believe that anyone in law enforcement will go after them. i am working with my colleagues. there are folks that want to go after them. i'm trying to work with all of them and to nudge along some other folks who are a little more reluctant. they're seeing action now. we filed several major lawsuits against them. the s.e.c. has filed actions. the department of justice will be following along. >> that's the big question. doj which we have not seen anything out of -- >> i think you should expect to see something soon out of doj
and the banks probably didn't expect us to file a lawsuit. to force them to comply with terms of the settlement. >> clearly they didn't. if they did, they probably would have stopped. >> probably would have been a little more cooperative. it is time for accountability. the american people -- the banks don't give you a bye if you forget and lose their documents. they don't deserve anything else. >> new york attorney general eric schneiderman, thank you for coming on. >> thanks, chris. right back with click 3. i . ♪ [ grunts ] yowza! that's why i eat belvita at breakfast. it's made with delicious ingredients and carefully baked to release steady energy that lasts... we are golfing now, buddy! [ grunts ] ...all morning long. i got it! for the win! uno mas! getting closer! belvita breakfast biscuits -- steady energy to do what i do all morning long. belvita breakfast biscuits -- all stations come over to mithis is for real this time. step seven point two one two.
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if there is a bill proposing new taxes, chances are grover norquist is against it. a new tax bill has norquist shoulder to shoulder with liberal democrats like senator ron wyden. i'll tell you what happens when ideology takes a back seat to the reality of washington politics. first, the three awesomest things on the internet today. as the only metal that is liquid at room temperature, mercury is freaky even under normal conditions. watch what happens when mercury reacts to different audio frequencies.
the experiment is the handiwork of photographer nick moore. the noise is produced by a failing razor. an old signal generator. the frequency increases, the more mercury freaks out. the result is pretty fascinating. the second awesomest thing on the internet today, an eye opening examination from mother jones into the state of public defense in america. it has been 50 years since supreme court's historic ruling affirming a defendant's right to an attorney, even if the defendant can't afford one. conditions for the country's poorest defendants haven't improved much over the years. in fact, they have gotten increasingly worse. public defenders are overworked and underpaid. the hours public defenders need to devote to his or her annual case load don't match up with the time public defender actually has. on average, a public defender would need about a year and a half to do a year's worth of work. for example, in new orleans, this is crazy, an attorney has
about seven minutes to devote to a case. the results, as you can imagine, for the defendants involved, are pretty grim. less justice and more prison time. excellent reporting from mother jones. i urge you to check it out on the website. and the third awesomest thing on the internet, we turn to the amazing video of the raw sea shot by cassandra brooks. a marine scientist. she's on a research cruise. she has documented a two-month journey across the icebreaker navigating the waters. you don't to sit through two months' worth of footage to take in the beauty of the southern most continent. enter this cool time lapse video which condenses the journey to under five minutes. >> these channels sometimes carved by enormous drifting icebergs provide a path for our vessel to travel. but they also provide a roadway for orcas and whales. the sea ice edge provides a resting place for penguins and seals. the ice edge is a busy place.
>> beautiful images from the bottom of the globe. take a look at the entire journey and get a sense of what it is we're trying to save. you can find all the links for tonight's click three on our website. we'll be right back. everybody has different investment objectives, ideas, goals, appetite for risk. you can't say 'one size fits all'. it doesn't. that's crazy. we're all totally different. ishares core. etf building blocks for your personalized portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs.
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collect sales tax on purchases made on the internet and puts a huge amount of money at play. in 2012, internet sales totaled almost $226 billion, up nearly 16% from just 2011. the bill's proponents argue it will raise an additional $23 billion in tax revenues for states and end the unfair competitive advantage internet companies have by being able to sell the same products as brick and mortar stores, without the taxes. this bill passing the senate is important for a number of reasons, not just because if you're watching the show right now chances are you ordered something online recently. but also because any time there is a vote in the senate, not any vote, but a tax vote, a vote that will increase the amount of taxes you pay, that passes the senate with this type of majority, your ears should patrick up because something very, very strange just happened. what happened is that we witnessed one of those rare moments, when you get to open up the body and see how washington actually works with none of the ideological or partisan covering
that people are there fighting over ideas. this was not a fight over ideas this was one collision of interests fighting against another coalition of interests. on the one side, you have republican senators mike enzi and john thune leading the fight alongside democrats and big box retailers like walmart and target. on the other side, senators from states without sales tax like democrats ron wyden and max baucus and kelly ayotte, fighting against the tax with the internet. with internet commerce giants ebay and overstock. this bill has so thoroughly jumbled political alliances that those democratic opponents made their way into a video proud by the heritage foundation. -- produced by the ter -- heritage foundation. >> the market place fairness act, but it is anything but fair.
>> i urge the senate not to move forward on the marketplace fairness act. >> sovereignty of our states is significantly eroded. >> could seriously harm america's small businesses. >> unleashes all the nation's tax collectors on small internet businesses. >> urge you to vote against this motion. ♪ >> now, if you haven't been paying attention to this battle, you may be a little confused and that would be fair because your usual rules of thumb likely will not apply. more than 20 republicans voted for the bill, which really makes you wonder, but on other hand, grover norquist hates it. so then is this in the final analysis actually good legislation? joining me now, ryan grim, washington bureau chief for the huffington post, rachelle bernstein from the national retail federation, acts as principal lobbyist for tax policy matters, and brian bieron, senior director at ebay. i want to begin with you on the politics of this. how have we come to the moment when the senate votes overwhelmingly in a bipartisan fashion for a bill that will mean more taxes are paid by
americans? i thought this was an anathema, what is going on? >> you notice they're not making a huge stink about it. >> not a lot of big celebratory press releases flooding my inbox right now. >> that's exactly right. it all starts with campaign cash. campaign cash is what sets the agenda on capitol hill. ideally you would want congress to address the issues that are most pressing to the american public. whether it is the unemployment rate, syria, whatever the public sends its representatives to congress to debate and legislate on, you would think, you would hope that would be what they would do. that's not actually what happens in washington. the people that set the agenda are the ones that pay the bills. and so this need for campaign cash requires senators and members of congress to create these exceedingly complex ways to get new issues into congress
that then require k street and industries to send money. it is sort of like the parasite and the host are sort of switching relationships in a strange way. so dick durbin and mike enzi, you know, they figured out, okay, we're going to work with we're going to pick that fight fp not because they liked it but they knew it was going to raise money. >> i'm offended. i want to talk about the policy merit. >> they might also have liked the policy. >> i do want to figure out whether this is good policy, how i should feel about this vote and whether i should see a vote in the house. i want you to weigh in on that right after we take this break. blan sure that we were on schedule.
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the internet sales tax bill passed in the senate today. reaction to the vote tells you a lot about the reality of washington lobbying. brian bieron of ebay. ebay worked hard to defeat this legislation. they even sent out e-mails to customers trying to rally customer base. big question for you is, look, everybody has got to pay sales tax when buying in a physical location. the technology exists. when i order something, they know they're shipping it to my address in new york, new york is a sales tax, shouldn't we just level the playing field and have everybody paying taxes? why have this imaginary distinction between, you know, the places that exist on the internet and the places that have to, you know, maintain a storefront? >> i totally agree, chris. we're against all imaginary distinctions. the ebay position on this is actually really clear.
and that is that it is the problem with this bill is that it is unbalanced right now. it treats very, very small businesses the same way that we treat multibillion dollar retailers. there is no level playing field between really small businesses that are often using the internet to grow including through marketplaces like ebay and giant multibillion dollar retailers that have facilities all over the country. this bill only tries to, quote, level the playing field just on one tax law that happens to be something that is a small burden on small businesses. and the larger burden on giant businesses. what we're saying is that to make this bill really work there ought to be a reasonable small business exemption so that when you're a small business operating in one state, that it is not possible for you to be audited and have to go to court honestly to fight the tax authority 3,000 miles away. and that is a possibility with this current bill and that's going to have to get fixed before this thing really moves. >> rachelle what is your response to that? there has been a lot of lobbying about how big the car battle
will be for the small businesses, which is a favorite washington undertaking. what is your response to brian? >> well, here's my concern. the problem is that we have brick and mortar stores, small businesses, in every community. and those people have to collect taxes on the first dollar that they receive. and if there is a very large small business exemption for remote sellers that is also not permitted for brick and mortar sellers, then those small businesses are still at a competitive disadvantage. and they cannot compete with remote sellers that do not have to pay taxes. they have that problem now. and we want have fixed the problem if we don't address it. i think the way to address it for the remote sellers that brian is talking about that are small is through simplifications
so that it is not a difficult burden for them to collect the tax, but not to -- not to treat one group of businesses better than another. >> brian, i'll get your response. rachelle, is there evidence, empirical evidence that in the states without the sale taxes, oregon for example, that people are more inclined to buy at brick and mortar stores? do we have any evidence suggesting that's the case? >> no, i don't have any evidence of that case. and as a matter of fact, i have to say when we survey consumers to determine whether they would spend less on the internet, if sales taxes are imposed, in fact, they say that they would probably maybe about 10% of them say that they think that they might spend less, but most think they would continue the current spending habits because of the convenience of the internet. we're just trying to level the playing field. >> everyone wants to level the playing field. brian, here is my question for you. it is i think a little known fact to folks, i only just found out, that you're supposed to pay these taxes. you're supposed to file in your tax return everything you bought over the internet, you're
supposed to record what you bought over the internet, sales tax wasn't applied to, and literally -- not literally, that's not true, almost literally no one does this. the numbers are laughable. the point is, this tax, it already exists. what exactly is the policy rational for having a tax that exists that is in the law that is in the letter of the law and it goes completely uncollected when there is $23 billion of revenue for states laying on the table? >> chris, there really isn't $23 billion as you saw from your statistic, there is about $225 billion of e-commerce that goes on. almost half of it already has sales taxes because giant -- no, no, no. but, chris, this gets the key thing, is that there is sales tax collection on the internet. this isn't about the internet versus noninternet. large retailers who have facilities in each state have to collect. this is fighting about how tiny of a business are we going to treat like a giant business. and that's where this bill is out of whack. >> can i say this?
>> sure. a mom and pop proprietor in new york, one employer, has to pay sales tax. it is not like the policy is something we scale to the size of -- >> here is the difference is that the small proprietor in new york state is only able to -- by the state of new york. but that's not the case with this bill. >> right. >> that same small proprietor could be taken into court by 46 states. that is a nightmare for small business. and these $10 million or $5 million or $2 million businesses, they're like a month of sales in a big box. >> can i get a sense from you whether this will see a vote in the house? >> we'll see. it is going to -- it has become a bit of a conservative litmus test. so for the first time, one of these issues is actually become a bit partisan. it is getting referred to the judiciary committee. the chairman there said he's not sure about it.
so we'll see where it goes. >> and norquist is rallying the army against it. ryan grim, rachelle bernstein and brian bieron of ebay, thank you. "the rachel maddow show" starts right now. >> good evening, chris. thank you, my friend. thank you for staying with us for this next hour. at the end of what has frankly been a really, really weird news day. today president obama made one of his patented bipartisan outreach efforts, played a golf foursome with one democratic senator and two republican senators. but because it is kind of a weird news day, the headline out of the golf outing ended up being that one of the republican senators, saxby chambliss of georgia, apparently hit a hole in one. seriously. in new york today, yet another state legislator was arrested and taken into custody by the fbi. this is kind of starting to feel like a daily occurrence in new york state politics. the really bizarre revelation ar t